After the Securities and Exchange Commission (SEC) once again rejected Grayscale's request to transform its Bitcoin Trust (GBTC) into a spot ETF, Grayscale filed a lawsuit against the agency in June 2022. Although Grayscale has stepped out to share its strategies in the event that the court sides with the SEC, the case is anticipated to last through the second quarter of 2023.
Still refusing to give in, plans for an appeal
On March 7, 2023, legal arguments will be held in the Grayscale Investments v. SEC litigation. The deadline was sooner than anticipated, but it was moved up because Genesis went bankrupt and because Grayscale's parent firm, Digital Currency Group, might have been experiencing liquidity crisis.
However, Grayscale is prepared for this as CEO Michael Sonnenshein asserts that the firm will not relent even if SEC prevailed. Sonnenshein stated that if the judge decided with the SEC's decision to reject Grayscale's spot bitcoin ETF, Grayscale will appealing.
An appealing of a ruling would bring the matter up to the U.S. since it is presently being processed by the District of Columbia Court of Appeals. The power of the Supreme Court or an en banc panel review. En banc panel reviews, where all of the judges of the appeals court convene to hear a matter, are rarely permitted in very significant or complicated matters.
Grayscale is adamant about making the GBTC a spot bitcoin ETF because it thinks there is no other way to demonstrate the significant discount to value the fund is now selling at and to maximize returns for its clients.
Genesis Has No Influence on the Grayscale Bitcoin Trust
When Genesis declared bankruptcy last week, speculation spread throughout the cryptocurrency industry as to whether this would have any impact on the Grayscale Bitcoin Trust. With much more than $14.5 billion worth of assets under administration and more than 600,000 BTC, the GBTC is now the biggest bitcoin trust in the world. Obviously, it could be devastating for the cryptocurrency market if such a fund were impacted and the GBTC were to be sold. Sonnenshein has informed investors, though, that neither the Genesis nor DCG events have an impact on the GBTC.
“Grayscale is a standalone entity with its own leadership, governance, budgets, policies and procedures, and the assets underpinning the Grayscale family of products belong to its respective shareholders,” the CEO emphasized.
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